Six Sigma

Sigma is the Greek letter used to indicate the Standard Deviation of a
distribution. In a Normal distribution, 68% of the population fit within
plus or minus one standard deviation of the average. At plus or minus
three standard deviations, this goes up to 99.7%, which means that only
three in a thousand fall outside these limits.

For many quality situations, three in a thousand would be a great error
rate, but for many, many others it would be intolerant (think surgical
operations, airplane landings or reliability of components--including the
multiplying effects of many components in an instrument). So
plus-or-minus-three-sigma is not always acceptable.

When you get to out to plus or minus six sigma, then the error
rate is two in a billion. Or, if you want to allow a little drift of the
center of the distribution, then this comes down to around three in a
million (3.4, actually), which is a lot tighter tolerance than three in a
thousand. To put it another way, three sigma = 1350 ppm (parts per
million), whilst six sigma = 0.001 ppm, or 99.9999998% accuracy (or
99.99966% if a drift of plus or minus 1.5 sigma is allowed).

So is 'Six Sigma' just a statistical tolerancing technique? Well, yes
and no. Mathematically speaking, yes. Business 'fad' speaking, no. Mikel
Harry, whilst at
Motorola, persuaded them to back a quality improvement program that
leveraged the statistical bit and then added a whole lot more. In
particular, it involved weeks of training and serious management
support to force usage of improvement methods. The trained people are
called 'black belts', 'master black belts' and 'green belts'.

Thus the real innovation in six sigma is not in the sums or the other
tools. It is organizational. It is about leadership, commitment, and all
those other things that takes to create real change and make proper use of
the tools of quality that have been around for many years.

Mikel Harry these days runs the Six Sigma Academy, where their the
biggest and most visible customer is General Electric, where Jack Welch's
enthusiastic style ensured serious management attention (you didn't get to
be a senior manager unless you had done the training and made serious use
of it). GE says it saved them around $10B to $15B in the five years up to
Welch's retirement.